Correlation Between Franklin Efolio and Franklin Founding
Can any of the company-specific risk be diversified away by investing in both Franklin Efolio and Franklin Founding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Efolio and Franklin Founding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Efolio Allocation and Franklin Founding Funds, you can compare the effects of market volatilities on Franklin Efolio and Franklin Founding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Efolio with a short position of Franklin Founding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Efolio and Franklin Founding.
Diversification Opportunities for Franklin Efolio and Franklin Founding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Efolio Allocation and Franklin Founding Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Founding Funds and Franklin Efolio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Efolio Allocation are associated (or correlated) with Franklin Founding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Founding Funds has no effect on the direction of Franklin Efolio i.e., Franklin Efolio and Franklin Founding go up and down completely randomly.
Pair Corralation between Franklin Efolio and Franklin Founding
Assuming the 90 days horizon Franklin Efolio Allocation is expected to under-perform the Franklin Founding. In addition to that, Franklin Efolio is 1.6 times more volatile than Franklin Founding Funds. It trades about -0.02 of its total potential returns per unit of risk. Franklin Founding Funds is currently generating about 0.13 per unit of volatility. If you would invest 1,573 in Franklin Founding Funds on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Founding Funds or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Efolio Allocation vs. Franklin Founding Funds
Performance |
| Timeline |
| Franklin Efolio Allo |
| Franklin Founding Funds |
Franklin Efolio and Franklin Founding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Efolio and Franklin Founding
The main advantage of trading using opposite Franklin Efolio and Franklin Founding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Efolio position performs unexpectedly, Franklin Founding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Founding will offset losses from the drop in Franklin Founding's long position.| Franklin Efolio vs. Franklin Efolio Allocation | Franklin Efolio vs. Franklin Founding Funds | Franklin Efolio vs. Franklin Growth Allocation | Franklin Efolio vs. Franklin Growth Fund |
| Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder | Franklin Founding vs. Capital Income Builder |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |